The French budget now before the Chambers, commences on 1st January, 1867, and ends with the 31st December of that year; it was before the Chambers in January, 1866, and will be left for examination and discussion by the deputies of France until July, when the law granting the credits necessary to meet the payments in the year following, is passed. The French Chambers are thus enabled, by an early prepared budget, to grant credits before any expenditure can be incurred, and ample time is allowed for examining the budgets of all French departments before authorizing the expenses. Whereas in England, through delays in submitting budgets, a constant demand is made on Parliament for "supply," on the plea that the public service must be provided with funds, in anticipation of the passing of the respective budgets. The importance of enforcing the great political and financial principle of not allowing any national money to be expended by the ministers of state until the national representatives shall have investigated, approved, and authorised the services or purposes for which the funds are to be applied, is strictly recognized in despotically-governed France. But in free England the practice of voting aids or supplies of money in anticipation of the passing of the budgets, and thereby pledging the faith of the country to accept the services set forth in these budgets, for which the funds granted "on account" are to be expended, virtually cuts off from Parliament that control over the national expenditure which members of the House of Commons are, by the constitution, bound to exercise. And all arises from the dread of having, as in France, too many open or unsettled budgets.

The important object of the French in keeping open budgets is misunderstood. When we hear of the definitive budget of a year being only closed with the final settlement of accounts of actual expenditure for that year, we contrast our one estimate and one account for each year with the many open budgets of France to the disadvantage of the latter. But then we forget that, under our practice, we have loose and vague estimating, and large balances in excess or deficiency to adjust, and outstandings of other years to clear off, so that when our year's account is closed, we are ignorant as to whether it includes all the liabilities either of past years or of those of the current year. Whereas in France the account of the year's expenditure, under different heads when completed, agrees very closely with the entries in the settled budget, and is at any rate always below, never in excess, of the credits, as is usual with us. It is true that the French budgets do not, any more than our own, provide for all expenses eventually incurred, for as the services of the year proceed it is often found necessary to grant additional credits; but it is a legal duty placed on each French minister, to abstain from incurring any liability until a credit has been obtained,

and this rule is strictly adhered to. Again, as these additional grants are made, when the Chambers are not sitting, only upon the legal authority of the Emperor, and after due inquiry by the council d'état and finance minister, the test as to their propriety is applied by authorities independent of the minister requiring the grants. The important result of keeping open budgets will be seen in the complete rendering of the transactions of each year. On this broad basis of regularly sanctioned credits, stands the efficiency of the machinery so well established in France, for ensuring accuracy in accounts. No charges are therein admissible unless the previously accorded credits fully bear out their propriety. The rule for applying beforehand for extra credits is enforced by the accounting check, and enables the Emperor to judge how far the foresight of the minister has been exercised. It is true that supplemental estimates are an evil, but the want of foresight is a far greater one. The impropriety with which our ministers spend money without having obtained credits, encourages want of economy and of foresight, whilst the practice of closing the account of expenditure within the year, results in the liabilities of one year being thrown into the accounts of another year. When we see that political changes have not stopped the successful working of the financial machinery, there appears to be good reason for the French claim on behalf of their budgetary system, that it is the best in Europe.

Further, the financial objection against open French budgets and accounts, when fully examined into, is found to be illusory. There is no real ground for the claim of superiority so frequently made on behalf of the English finance system, seeing that our results cannot be tested in the exact way to which the French system is subjected. The English accounts, loose from the way in which compiled, are more so from being based on loose estimates, incompletely examined, hastily passed, and, on the payments made, within the year, not being compared with the estimated amounts, and without testing their propriety by independent audit as to their sufficiency for paying off the year's liabilities. The French budgets' system, complete and uniform for all branches of administration, are clear and specific in setting forth the data on which the expenditure for the service of the year is to be incurred. After being carefully compiled by the respective departments, they are subjected to a severe scrutiny, by independent officials, having ample time afforded for the examination, and practical knowledge by which to judge of the accuracy of the entries; this check is used in a way well calculated to diminish irregularities, it prevents the expression of vague or deceptive demands, and, when the account is rendered, another independent court is able to judge how far the duty has been efficiently per

formed.

IV. Contrast between French and English Accounts.

The French national accounts are prepared from and based entirely on completed payments, carefully audited, before being authorized to be paid or passed, as to their arithmetical accuracy, as to sufficiency of proof in the bills and vouchers prepared by the claimants, whether the demands are in accord with the budgetary credits, whether the services were performed within the year, as to the correctness and completeness of the payments in clearing off the budget liabilities of the year: and until such inquiry is closed, as to whether the work, duty, or supplies which the budget set forth, have all been shown to be paid for, the disbursements and accounts are necessarily kept open, pending this settlement, but only to the end of August. Finally, the whole of the vouchers for payments made on the authority of the estimates are compiled into one account by the minister of state at the head of each department, and the whole subjected to a severe and independent audit by another independent board, in order to test the perfect agreement of the charges with those in the budget. And thus, whilst the French nation enforces clear and accurate accounting for expenditure actually incurred in respect to liabilities for services within a specified period, the system reacts on the administrative officers by enforcing care in preparing budgets.

The English national account is, in its looseness, in marked contrast with the close, accurate, and strict accounting of France. It is based on the amount of Exchequer credits issued to principal accountants in order to meet payments within that year to which the credits alone apply. These credits neither represent the actual cash drawn out of the Exchequer, nor the actual payments made within that year, nor do the credits clear off all liabilities imposed on the nation during that year; and as there is no written national estimate of revenue and liabilities there is no contrast made, as in France, between anticipated and actual results. The English national account does not show the income due for the year, merely the amount collected within the year; and the expenditure drawn up from credits must, as Mr. Anderson and Mr. Macaulay have stated, be mainly fallacious, and ill-calculated to set forth the real expenditure of the country. The quarterly and annual finance statements, erroneously called accounts, purport to show the receipt and expenditure of the country, and are considered to be promptly published, and generally looked on as very satisfactory documents; the difficulty in dispelling delusions as to their real character is great. Their really defective character has, however, been fully exposed; even in respect to promptness, the French system would not be found, and is not actually, wanting even in this merit; did

the French deem the main object of accounting to be the compilation of a simple statement of all moneys put into or taken out of the treasuries, then their treasury accounts do more accurately show a result, which we attempt but cannot show. The French people know too well that such a course would fail to exhibit a true account of the national funds, and prefer authenticated accounts of national income and expenditure compiled from audited vouchers, and are well content to wait till these are ready. They bear with patience all the evils with which the English imagination surround the system of many open or unsettled accounts.

The English nation, being unwilling to allow time for maturing results which would test the agreement between anticipated and actual collections, also of promises to pay, such as the entries in the expense budget may be considered to be, and actual payments made, such as audited accounts would show, insist on having, as their only national statement, "the Cash Account of the Lords of the "Treasury," published annually in the Finance Accounts I to VII. Moreover, as no other account, more perfect than this one, has ever been published for the information of the country-indeed, as much of the national outlay has never been subjected to the examination of the Audit Board-it is impossible to draw up any general statement from audited or verified vouchers. No proof is afforded whether the payments into or out of the Exchequer are authentic, not only as to amounts, but as to their agreement with the sums due within a specified time; consequently, it is impossible to exhibit all the defects of the English mode of accounting for the national income and expenditure by comparing real with these erroneous accounts. Nevertheless, some of these errors may be pointed out by accepting as well audited, though not so in reality, the accounts of the expenditure of the two great departments-army and navy.

For example, No. I of the national account series designated "the cash account showing the whole of the financial operations of "the Lords Commissioners of Her Majesty's Treasury in connexion "with income and expenditure of the United Kingdom," professes to show the annual expenditure for the army separately from that of the navy. But a glance at the finance accounts of a few years will demonstrate that the practice has prevailed of blending under one entry, "army and navy," large sums received from both these branches, as well as large amounts paid away on the joint account; thereby rendering it impossible for any one to ascertain the exact expenditure for either of the two services, or the recoveries, within the year, from each, neither is it possible to ascertain, whether all the moneys due for the year and payable within the year, have been duly paid.

Thus, in the cash account for the year ending 31st March, 1861,

the very large sum of 3,043.8961. is entered as a disbursement under the one head "Naval and Military Operations in China." And though the House of Commons is primarily responsible for having by its vote granted any such amount as this for the general use of both, without requiring the appropriations to each service to be shown, still the Comptroller-General of the Exchequer had a right to insist that the credits issued by him to the Paymaster-General for the expenses of the two services, should have specifically stated the amounts for one or other, and not given one credit for both in common. Thereby he would have enabled the Lords of the Treasury to set forth, in the annual cash account, the credits as separately appropriated to the two heads, army and navy.

Owing to this blending of disbursements for both services under one head common to both, I am compelled to compare the actual expenditure, certified to by the Audit Board, for both departments with that set forth in the "cash account" as having been expended for both. During the last eight years, for which complete accounts are available, in the one year 1856-57 the hitherto important national "cash account" showed a total expenditure of 1,510,6147. less than the amount certified to by the Commissioners of Audit as having been incurred for the two services; but in the year following the Commissioners certified that 1,815,394. had been expended for both services, less than the sum entered in the cash account. This compensating quality in respect to excesses of one year balancing the deficiencies in another year, has frequently been urged as a ground of excellence in our system of accounts, rendering unnecessary the careful and elaborate efforts made in France to secure, by good system, that accuracy which England only obtains by the chance of errors correcting errors.

But this happy-go-lucky system of obtaining accuracy in the national accounts by making one error correct another, which would, if resorted to by merchants and bankers, soon land them in the Bankruptcy Court, cannot, even as respects the national accounts, serve the purpose of those who approve the plan. For, on adding up the whole expenditure for army and navy as entered in the last eight years' "cash accounts," and comparing the total with the amounts certified to by the Commissioners for Auditing the Public Accounts, as having been expended for these two services during the eight years ending 31st March, 1864, the excesses and deficiencies of these several years are found to amount to the vast sum of 6,741,705.; and by striking a balance between the excesses and deficiencies on the eight years' total, the national "cash account" shows an expenditure, for combined army and navy services, in excess of the actual expenditure which the Audit Commissioners have certified to as the actual outlay, amounting to 2,971,6411., or equal to one year's national surplus, which Mr. Gladstone has been so